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Why Defi Is Hot Right Now and How Safemoon Will Dominate Crypto

Shaun Witriol

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There is a new wave of financing coming, and it is going to change the way money is handled. Have you ever considered the fact that you do not actually own the money in your bank account? If you have thought about this, then Decentralized Finance is right up your alley.

Decentralized Finance (DeFi) is the most recent evolution in cryptocurrency. Why is this an evolution? It is a system where software is coded to cut out the broker in the middle.

The basis of DeFi is a system where coding is written to interact directly with buyers, sellers, and lenders to allow borrowers to interact peer to peer or directly with a software-based application.  This is different from all banking systems where users must interact with a company, which makes it decentralized.

DeFi has been created as an extension of blockchain technology, where DeFi is a decentralized system containing a mix of open-source technologies.  These transactions are conducted using smart contracts that allow for automatic agreements and rapid transactions between buyers/sellers or lenders/borrowers.

This is how DeFi is able to remove intermediaries and function as a peer-to-peer transaction.

Think of the Decentralized Finance system as a process like this – when you walk into a coffee shop and pay for a coffee with a Visa card, these payments go through Visa, who acts as the middleman to send the money to the recipient.  They control the transaction, and ultimately hold the authority to make the payment happen.  With DeFi and cryptocurrency, the holder of the crypto remains the authority of the transaction, which, in turn, allows you to own your money.

Payments are not the only aspect of Decentralized Finance that is intriguing about this evolution in blockchain technology.  

Here are some of the more popular ways it is being utilized

1. Lending platforms

These are platforms that allow users to lend out their crypto to users as loans based on the amount they hold within their account. This is an area that functions like a bank, where instead of having to go through a credit check, the user can borrow a certain percentage of their account without withdrawing from their holdings. Example – Users have $100k and are able to borrow up to 50% of their holdings at 3% interest.  If the user makes timely payments – the account is completely restored to its full value.  If the user is not able to make payments on time, the lender will take control of the amount loaned out of their holdings.

2. Yield-Farming

This is a platform where an investor will collect cryptocurrencies/tokens and lend them to borrowers, in turn, paying back interest to the investor.  These rates can be fixed or variable, which is based on the crypto asset and the platform. This strategy is based on earning a high yield return on the assets in the account.  It is a straight way of earning up to 100%APY on a crypto asset. These types of returns can be returned in the same coin or in a different coin. The returns of the coins can help increase the rate of return as the value of the coin grows over time. This is different from a regular bank account, where money can accrue interest on the money that will only decrease in value over time.

3. Tokenomics

This is an aspect of cryptocurrency where it creates price stability over time, which has been the biggest area of concern – price volatility.

  • It redistributes the crypto asset to help reward validators or holders for maintaining the specific coin.
  • This limits inflation and creates a deflationary coin that grows in value over time.  
  • This aspect can be considered as a block reward or as a reflection from trading volume.

An example of this would be a block reward for mining (validator) a certain amount of Bitcoin over time. If a miner completes a certain number of equations over time, then the Bitcoin Blockchain will reward the miner with a block of Bitcoin.

Another example of this is with a deflationary token, where a percentage of the trade is collected and redistributed to the holder. A coin/token collects a small fee and instead of keeping that fee it is redistributed back to each holder as a reward for its investment.

The biggest name in the new wave of Tokenomics is a crypto token called Safemoon.  This crypto token is a community-driven project launched in early 2021.  Currently there are more than 2.3 million holders according to BSCScan.com and upwards of 1 million more on various exchanges.

Backed by former U.S. Department of Defense employees, Chief Executive Officer, John Karony, and Chief Blockchain Officer, Thomas Smith, the premise of Safemoon is a deflationary token.  The holders are rewarded for maintaining tokens in their wallets, and a portion of each trade is sent back to the holder, while another portion is burned from existence. 

 

 

This action will help create price stability and work against inflation as supply is completely removed from existence with each automatic burn.  This also acts as a reward to the wallet and discourages selling.

This is their biggest feature – the reflection.

Reflections or static rewards are based on the size of the wallet and the amount of volume traded.  

  1. Larger the wallet – larger the reward
  2. Encourages holding for the larger reward and increases price stability over time

Other separating factors are adoption and utility.

Safemoon has just completed sign ups for Beta Testing on their Wallet and has plans on releasing an Exchange later this year.  

The wallet will allow for easier purchasing access and will include Apple Pay, which means that many online stores will accept Safemoon as a form of payment.  This is important because it immediately adopts Safemoon as a form of payment via Apple Pay.

 

 

The exchange will incorporate tokenomics across all coins/tokens on the platform.  This can be done by taking some of the trading fee and giving back some of the coins to the user.  A trading fee is common across any exchange, but the return of a portion of the coins to the holder is revolutionary to the industry.  This is a process known as Cryptonomics.  

Safemoon also has their own blockchain, cold wallet, and NFTs planned in the future.

Adoption and utility are the driving forces in every aspect of cryptocurrency, and Safemoon will have achieved a large part of this in the very near future.

 

** PLEASE NOTE: This article is not financial advice. You must do your own research. These are observations as to what is happening in the cryptocurrency and DeFi world and is an exciting field that is worth exploring and learning more about.

 

Shaun Witriol holds an M.B.A., and an undergrad in accounting. For over 10 years, he has been able to help individuals work towards financial independence, build leadership qualities, and the accumulation of wealth. He also has over 7 years of experience analyzing and reviewing cryptocurrencies.  His past work experiences include managing a tax practice, working in professional sports, working in one of the biggest financial institutions in North America, and a top tier audit firm.

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The Benefits of Using Cryptocurrency in Your Business

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Cryptocurrency is still a new concept to many people around the world. It is a new form of digital currency that has quickly swept the internet by storm. However, many people believe it’s the future, and many businesses accept it as payment for their services. This article will explore several benefits of using Cryptocurrency in your business and some risks that may involve crypto in business. We’ll also go over steps on how you can use it in your business! (more…)

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How NFTs Are Revolutionizing the World of Gaming

Tyler

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nfts-changing-gaming

Gaming might be the world’s favorite past time, but what if it became more profitable than working?

 

Time is money as they say, especially while enjoying your favorite online games. The time it takes to reach the highest level and acquire a top set of items in any MMORPG (World of Warcraft for example) carries value simply because there are people who would rather pay to skip months of grinding levels, gold, and gear. The value of digital items across popular online games further sparked an entire industry where workers are hired to play games all day with the specific goal of earning as much in-game currency as possible, so they can ultimately sell it in exchange for their own local currency. In fact, regions within multiple third-world countries have become entirely dependent on the billion-dollar business of what has become known as “gold farming”. 

 

The challenge however is that these games all explicitly prohibit any “real life” monetary transactions in regards to your account, your characters, and your items. Discussing or soliciting the sale of your virtual property is immediate grounds for a permanent ban, in which case your account, characters, and items would be irreversibly inaccessible. 

 

Because of these restrictions, selling your character or rare item generally requires you to have a private buyer lined up – otherwise your best option would typically be to find a 3rd party marketplace that connects buyers and sellers. This carries significant risks however, as scammers on both sides are prevalent. Most commonly, account sellers would contact the game’s support team to prove their identity as the original owner, thus resetting the account’s login credentials and returning the entirety of what was sold straight back to them.

 

What if you could secure, trade, and immortalize your character and all of their items on the blockchain? This is exactly what NFT powered games are now offering with immense success – under this structure, monetizing your character is not only allowed, it is showcased as the primary attraction.

 

axie-infinity-homepage

In June of this year alone, NFT-based game Axie Infinity saw players make over $42 million in sales, going on to be the #1 most valuable NFT collection.

We are genuinely on the very cusp of this trend as there are not many NFT-based games in existence, with hardly any AAA developers publicly indicating interest let alone announcing such projects (although we will inevitably see this soon). Given the decentralized mindset of the cryptocurrency community, the NFT space is truly poised for creative and unique indie developers to thrive.

Screenshot of DashLeague.io – Home Page

Among the most exciting of these independent gaming ventures is DashLeague.io, a Runescape-meets-Minecraft style MMORPG utilizing NFT tokenomics in completely new ways: players who conquer a town will then earn passive income on the town’s shops from all in-game item sales made by other players. In high-stakes PVP scenarios items can be taken from other players, transferring their NFT to your own wallet in real time.

Teaming up in “leagues” with other players allows you to split token rewards from defeating dungeons as well as pool conquered maps. DashLeague is intentionally structured for players to literally earn money while they sleep, which is hard to argue with considering the sole purpose of these games: to have fun while making money. What may prove to be their most brilliant move of all is their decision to theme the game around the same retro, pixelated style that resonates so strongly with the crypto community as shown through the wild success of NFT projects like cryptopunks and meebits.

 

As the NFT realm continues to grow in both awareness and application, one thing is for sure – the gaming industry has always been incredibly lucrative (out-earning both the movie and music industries combined), and with the adoption of these hyper-monetized NFT structures, will absolutely be stimulating real-life economies and jobs in a dramatic fashion.

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